Finding the right early customers for a start-up

Before starting my technology company, Posse, I built a music management company in Australia. With each new artist, we would start from scratch with no profile, no fan base and no money to spend on marketing. I’d work out how to develop a brand and how to reach the right community of early adopters. Most bands give up before they reach 10,000 fans. After a while, I learned that if I developed a fan base of 10,000 and the music appealed to a wide market, the next several hundred thousand fans were relatively easy to come by. During eight years in music, I helped develop the careers of 11 artists. All were unsigned when I took them on, nine reached gold sales and four of them reached platinum.

Here are a few tricks I learned building fan bases for bands that I also used to build a community for Posse:

1. Don’t underestimate the value of passionate fans

The best way to experience a new band is in a small venue crammed with screaming fans. These taste makers become the first to discover a new talent, and they will later say, “I saw them at X with 200 other people, and now they’re playing stadiums.” But how do you find this first group of fans?

In the music business, I won over these critical people by engaging them one-on-one, a slow process that required lots of hard work. In 2009, my management company, Scorpio, signed a young musician called Matt Corby. No record company was interested in signing him, so we built his fan base without any budget. Matt had friends who were fans, and they had their own friends. We started putting on free concerts in people’s backyards, and soon we had requests for Matt to play in gardens all over the country. Our hosts started covering his travel expenses, and at each one, we sold CDs and collected email addresses.

After plodding around every weekend for two years, we released his music on iTunes, and he started with a small but committed fan base. These fans had seen Matt play in a backyard, and they felt they had discovered him, that they were responsible for his success — which they were, for those early fans became Matt’s evangelists. His iTunes single “Brother” sold more than 200,000 copies and won him a recording contract with Atlantic Records. In the same way, tech communities can often take years to develop. When Twitter was introduced in 2006, it attracted a small but passionate user base before really taking off in 2009. Pinterest began in 2009, inviting a few designers to use the platform, and each receiving invitations to give to friends. Ben Silbermann, Pinterest’s co-founder, has spoken of his difficulties raising money from venture capitalists because the site’s early growth curve wasn’t steep enough, which seems laughable today. But it was not until 2012 that Pinterest really took off.

Posse’s strategy for building that initial base involves a student adviser program. We advertise on free student job boards all over the world, seeking advisers to intern from home. They commit to completing two activities a week during a four-week program, and in exchange we provide them with a letter for their résumé. The activities include running user-experience tests, writing up product feedback and suggestions, recruiting friends to join Posse, promoting Posse to retailers in their area with stickers for the store windows, and writing blog posts about the best places in their town. We run the program every four weeks and aim to sign up 150 advisers.

We recently introduced Posse in Singapore and ran the adviser program for three months before promoting the platform to the public. So, when people in Singapore joined the app there was already an active user base and lots of content on the platform. The program has proved an effective, low-cost way to build communities of engaged evangelists. The advisers report that they learn a lot and use the reference letter to gain entry to university courses. Many wish to stay involved with us as brand ambassadors.

2. Leverage other people’s fan bases

In music, the easiest way to build a fan base is by landing a support slot with a major artist. When the band performs as an opening act, thousands of music lovers get to see them.

At Posse, we feature high-profile people on our blog in the hope that we will attract their followers. We publish two or three blog posts every day from celebrities, highlighting their lists of favorite spots to eat, drink and shop in their hometowns. For example, here’s the list of places to visit in Los Angeles posted by Hillary Kerr, co-founder of WhoWhatWear. It’s easy to ask a chef, fashion designer, musician, actor or politician for their favorite places; people love to share their recommendations.

Our community manager Chris writes up the blogs and encourages our featured celebrities to share them on Facebook and Twitter, which they usually do, often to hundreds of thousands of followers. He also reaches out to each of the featured stores, and they all post and tweet the link. Everyone is looking for content to post on social media, and the blog posts generate a huge amount of traffic for Posse.

3. Make sure the product has natural momentum

One of my early clients in music was a band called The Hampdens. The female lead singer had a powerful, ethereal voice, and I fell in love with the music. I paid for the band to record a CD that we released independently, and I used my contacts to get the group onto tours opening for major artists. But the CD didn’t sell. I was baffled. I believed in the band blindly and spent two years and more than $100,000 promoting it. The group was never able to attract passionate fans, its audience didn’t grow and the members became disheartened and gave up.

By contrast, I promoted another band called George. Again, we recorded and released an independent CD and hit the road. Every time George played, people bought CDs and T-shirts. Our independent CD sold more than 30,000 copies, and every tour would double the numbers of the previous one. In 2002, we released an album, “Polyserena,” and it was an instant hit.

When I started Posse, I thought our initial version of the product was great — but it didn’t gain momentum. People didn’t share it with friends, and users would drop off right after signing up. I remembered my discovery from music management: If people don’t love the product, and it doesn’t grow organically, no amount of marketing will save it. I have spent two years improving Posse, and it’s now reached a monthly growth rate in new users of 15 percent, without marketing. We’re almost at the point where I’ll be confident enough to start spending marketing money.

There’s a graveyard for businesses that fail to commit the time and effort to build a community of fans. Many spend a fortune on marketing too early – before the product has gained natural momentum and before there are committed customers. No one wants to watch a band in an empty room. Finding the right first 10,000 fans takes careful thought, hard work and patience. There are few examples of bands or companies that just take off without a coherent community strategy.

If you have any strategies to share, we would love to hear them.

 

CATEGORY: Growth, New York Times, Strategy

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